when cross-border e-commerce companies no longer need "pirate spirit"

 The following content is from new eyes

the gold rush of cross-border e-commerce in the past two years, life is also difficult now.

affected by the epidemic in 2020, the logistics cost doubled enough to make products lose the price advantage of made in China. Domestic and foreign trade imports and exports are sluggish, and cheap labor in Southeast Asia and other regions are also crowding on the world market. In order to solve the problem of overcapacity in manufacturing industry, cross-border e-commerce companies broke out against the market. The annual transaction scale reached 12.5 trillion yuan, up 19.04% year-on-year, and the penetration rate exceeded 35%. Internet giants such as Ali, Byte and Jingdong entered the market one after another,Anke Innovationand Saiwei Times in the capital market has further accelerated the entry of capital.

According to the new eyes incomplete statistics, in 2021 domestic cross-border e-commerce track financing a total of 77 up to 20.7 billion yuan, up 191.96% year-on-year, of which angel round, AB round accounted for the majority, the industry than in previous years there are signs of recovery. However, according to the latest data, the actual scale of cross-border e-commerce in the same year was 14.2 trillion yuan, which was lower than the 14.6 trillion expected by the previous market, and the growth rate dropped by 5.44 percentage points from the previous year.

Figure: Statistics of Cross-border E-commerce Scale from 2015 to 2022

with the help of capital, the industry began to grow savagely, but the fragility of the cross-border e-commerce model, lack of profitability and other shortcomings are gradually exposed. on the one hand, by the head platform service that is not amazon's, in letter shop-music of the tide, freeze accounts, the closure of inventory a series of operations to super-wu wan seller has ever lost hundreds of billions of dollars, practitioners and fell into a normalization of the trouble; on the other hand, Facebook platforms such as obtaining data of limit and reduce business accurate delivery, operation cost is rising.

present thought we had come to the principle of entropy increasing the inflection point of the: and, behold, the woman has entered the next confusion: shipping costs rise, capacity of a drop lower and lower, storage charges a rise increase again, in order to return the funds, old sellers to take low-cost spiral policy qing ku cun, potentially lower the cross-border threshold, a large number of new influx with low-cost share, the price war hit fly.

obviously, the combination of "flow + distribution + straight hair" in the past is no longer feasible under the impact of the current reality.used to do e-commerce export believes that the domestic e-commerce market is saturated qualitative foreign although early, but not hot enough, together with the spread of the dividend players into the blue ocean gold and make a lot of money, more like a kind of destruction, share all the pirates spirit; now would be the end of an era, the transformation has become the most important thing.

01 Origin Cross-border

over two decades ago, the domestic cross-border e-commerce not rolling, and exports are collectively referred to as the foreign trade. Transactions mainly rely on middlemen called "compradors" to line up at home and abroad, and domestic factories undertake foreign companies' demand orders, thus developing large-scale industrial clusters, but the disadvantage of this model is that it is not transparent enough. There is a large asymmetric information gap between enterprises, which will also affect the specific transaction process and other aspects such as logistics.

, there is a need for an objective platform to release and display information. For example, the Yellow Pages of China, which represents the prototype of early Internet B2B, has basically realized the information docking of domestic and foreign commodities. However, due to the influence of platform capability, environment and other factors, it cannot reach 2C at this time.

with google, yahoo and other internet web site gradually penetrated, foreign trade enterprises come to realize that its goods give buyers rounds reselling, why don't these platforms directly connected to the buyer, and the platform of the flat implies symbolically that is docked to the opportunities for individuals and. 2005 nian after cross-border e-commerce the word into the mass line-of-sight.

Lanting Jishi also appeared at this time. The founder Google was born directly. He obtained traffic through Google's delivery and built his own website for sales. SHEIN, which was set up one year later, was in full swing. It is said that Lanting was also referred to in that year.a new mode, in people's eyes is often tuyere soon on the market you copy my work and I'll take you, old origin, each station, at the same time fakes rampant, cause a lot of the lawsuit, the mobile internet on the eve of the cross-border e-commerce experience large scrubbing, the survival of the fittest, some players turned to start a service provider.

the future, it is the story of the e-commerce platform. eBay, global AliExpress, amazon, has the advantages of simple operation, and haul and give a lot of individual businesses do cross-border making quick money opportunity. although merchants and platform which is what they need mutually fulfilling relationship, you give me the flow, you don't know what a nice-what volume but merchant often easy to ignore their own itself is subject to the platform policy.

such as amazon requires violations of the consumer rights and interests of, or depend on scalping cheating violations of other merchant interests or public domain in engage in private do fly single is a direct violation of platform rights and interests, these chaos of interesting dross, now each have become high-voltage line. Therefore, in the early stage of the development of cross-border e-commerce, industrial agglomeration and mature ecology were not realized, and the market was still dominated by goods, but even so, players had already stood in line with their skills.

figure: domestic cross-border e-commerce competing factions (source: forward-looking economist)

on enterprises mainly in its individual businesses, B2B,B2C,C2C,B2B2C, agents, wholesalers, distributors, the intermediary agent, from production to sales to final consumption, most of its third-party platform layout independent stations of the cross-border enterprises only 25%, also have a high-end players ke jin on-the main reason for this change is to better mall.

imports, china's B2C market is showing a super-how the pattern of Tmall international,Koala Haigou, jingdong international ranked the forefront of the market as a whole is in the rise ali tied import 2C end of the stable status, market structure basically stable. import and export ratio of about 1:4, exports account income bulk, which amazon, amoy, department of eBay market share was 22%, 5%, 5 wt%, the head platform market concentration is low, small and medium-sized e-commerce platform and the establishment of the station occupy the mainstream.

by investigating head export players with annual income of more than 1 billion yuan, such as Ali's Lazada, Trendyol, Anke Innovation,contact interactionand Huading found that their products are mainly concentrated in 3C, computer hardware, daily necessities, clothing and other fields. What they have in common is that in addition to choosing multiple platforms to settle in, most of them also do offline channels, focusing on supply chain and brand building.

02 Platform or Proprietary?

whether export or import, cross-border electricity dealers can be divided into two types, platform and self-independent station type. However, according to the product category and the number of SKUs, cross-border sellers can be divided into boutique mode and pan-product mode.

: Cross-border e-commerce companies are divided into products and platforms and their characteristics (drawn by new eyes)

for businesses, platform + pan products have the lowest entry threshold and are also the deepest way to enter the market. "0 basic introduction, no supply of goods, a generation of hair, massive resources, part-time, sideline, monthly income of millions", and so on, hype has become the label of leek cutting in the industry.

the original intention of most people to choose to do cross-border e-commerce, in order to earn commodity price difference and exchange rate difference,"For example, if a garbage can is sold in 12 yuan at home, you can buy 35 euros abroad. If you convert it to more than 250 yuan, minus the cost and international logistics, the net profit can be 180."a cross-border service practitioner to tell new eyes.

it is understood that if full depends on the service provider from the registration, product selection, manufacturers docking, sales, artist, to operations, logistics swept, full-process guidance plus remote service, product selection maori is not less than 40%, service offering typically cost 3W-10W between from the platform pumping domestic proportion according to categories, in 8-15 points and above.

, take Amazon as an example. After merchants pay different proportions of intermediary fees according to commodity types as commissions, there are also high advertising fees, storage and transportation fees. After the store closure, the price rises, and retained merchants can only advertise through the platform. According to a survey conducted by ILSR in the United States, Amazon's advertising fees in 2021 reached about US $27 billion, of which US $17 billion came from third-party sellers, doubling from the previous year.

and traffic as the most important factor,"said platform in front-loading support traffic actually just gave a probability your Listing to good enough on the assumption that it was you who Listing import traffic and conversion rate, growth and are ranked higher than the peer-to-peer platform will be to increase the weight, late period to add money."a cross-border players pointed out that the "bigpart is pits, among the more brutal speculation, ten years ago, maybe make almost can't carry finally goods break every hand ". In addition, in last year's Amazon store closure incident, merchants in the pan-product model were the most affected.

without precipitation, no ranking weight others over a long period time precipitated sales and product are insurmountable the invisible barriers,this is not only for individual small players, but also for large companies and even Internet giants that bring money into the group. The most typical example is SHEIN's apprentice.

SHEIN's exponential growth does not need to be repeated. Its success rule has become a prominent subject in cross-border e-commerce circles.

, whether it is the main cost performance ratio, the business model of "small single quick return", the flexible customized production that is good at in the fast fashion field, or the multi-type digital management system, the compound position of buyer designer, the marketing strategy of low-cost promotion, etc., are considered to be the indispensable genes for building this 100 billion dollar unicorn.

main category and SHEIN overlap of the ldk and sub-silence, the former in the third quarter of last year revenue and net profit year-on-year were sharply declined in the latter in jin nian 3 yue to the hong kong stock exchange two pass IPO application, its revenue mainly comes from the amazon, Wish and eBay three e-commerce platform for three consecutive years operating activities net cash flow high billions, means that the company inventory backlog more,these two companies belong to the B2C model that is highly dependent on third-party platforms such as Amazon, the contribution rate of self-operated websites is still quite limited, and the voice of upstream suppliers and downstream third-party platforms is weak.

In addition, the Allylikes and Dmonstudio successively introduced by Ali and Byte have more or less imitated SHEIN in supply chain and marketing. The former belongs to Ali AliExpress. Although there is a platform as a precipitation, the result is still not successful:'s own platform does not participate in the manufacturing and design process, Allylikes is in an independent existence internally, while SHEIN brand is self-operated and has closer direct connection with suppliers.

, Zhang Yiming talked about content products going out to sea, sayingable to do a global content you want to localize.analogy with the "Conquest" page tour, which was popular in the Middle East in the early days. On the one hand, the content naturally has the attribute of communication, from character setting, scene to plot, which is localized and easy to be accepted. As a carrier, the model and design of the product itself can be reused, and the usage habits of consumers can also be cultivated day after day, thus forming the Matthew effect.

, but it is also going to sea. This set of play is not so effective for cross-border e-commerce.

from early embedded platforms of TIKTOKShopping to main european market dress beauty, benchmarking fight a lot of platform-independent Fanno and byte internal belong to S level of the independent station Dmonstudio bytes not only in the areas of cross-border e-commerce, it has formed the full chain and by investing in pa extension-and other e-commerce brand has its own platform + supply chain + logistics of the closed-loop. but with the Fanno, Dmonstudio back-to-back off, cross-border e-commerce business in the awkward position.

everyone wants to rebuild SHEIN, the fact is always unsatisfactory. Founded in 2008, SHEIN was in the blue sea at that time. Pei Yang, a product partner, once revealed that the cost of cooperating with a million Internet celebrities is as high as 50000 US dollars, which was even as low as 30 US dollars six years ago. in addition, the product category, low-cost and quality trade-off between the became later insurmountable plight.

design, technology, capital, Internet giants are not lacking, but in the final analysis, today's cross-border e-commerce ratio is not only commodities, but also whether the supply chain and logistics can cooperate well. Only after long-term polishing can we eat the dividends brought by the flywheel effect..under normal circumstances we are of the view that the domestic cross-border businesses mainly in Amazon on platforms such as sales, easy; but SHEIN began to be independent station from PC-the main reason for this change is to better to the back of the store and came back with the APP, is the first easy.

, whether it is a platform or an independent station, in the eyes of many people in the industry, the main reason for not doing well is that on the one hand, it lacks the right time and place, and on the other hand, it takes less time to establish connections and polish products. ", when many entrepreneurs come up, they take the money directly to shop scale, rush sales, make quick money and die quickly.."This has become a common problem in the industry of cross-border e-commerce.

03 Risks and opportunities coexist.

Even so, cross-border e-commerce is still like in the eyes of many people.rainforest is full of opportunities.

look at the domestic situation, specific to the recent actions of the head enterprises:Alibaba no longer uses subsidies to create new products, but focuses on creating consumption scenarios and optimizing service experience. When talking about Amoy Caicai, Zhang Yong emphasized that development cannot be driven by subsidies, but should rely on user experience and sustainable business development.

players in the domestic e-commerce field, whether Meituan, Pinduoduo or Jingdong, have also made business adjustments this year. Meituan preferred to abolish Beijing business; Spelling more "cut a knife" magic lost, turned to farm; JD.com is also maintaining core users, strengthening the supply chain--from quantity to quality, players focus on the stock of users, which shows the peak of Internet e-commerce traffic.

in contrast to foreign countries, under the epidemic, many traditional retail enterprises in Europe and the United States went bankrupt, completely changing their original development path, offline retail format online, e-commerce penetration rate rapidly increased: from 2018 to 2018 stable at 14%, to 2020 21.3%, e-commerce sales increased by 44% to 861.12 billion US dollars year-on-year, is a huge incremental space.

, but as the saying goes, only the thieves eat meat but not the thieves are beaten. For example, when the front platform comes to a wave of cleaning, many players are being held to death. The rainforest is full of vitality and crisis. At present, cross-border e-commerce still has many barriers to pass.

Take logistics as an example. With the shortage of transportation capacity, cross-border players are facing losses caused by problems such as overstock of goods and platform punishment, as well as the problem of declining homepage scores, even account closure and rapid rise in sea freight. Data show that the US-West freight rate soared to 15K last year. Even if there is a "special line + overseas warehouse" to lock in the freight rate, the supply of overseas warehouses falls short of demand in peak season, which will inevitably accelerate the expansion of the industry scale.

research shows that in addition to platforms, the construction of overseas warehouses today is driven by capital and services, and enterprises are perfected in all aspects. The other is derived by local people themselves. In short, the mismatch of entry, demand and supply of new players has almost doubled the cost of warehouse rental and labor. Rising costs are a reality that every cross-border person must face.

In addition, due to the shadow of Amazon's store closure and the SHEIN model, a large number of cross-border players flocked to the decentralized independent station platform, setting off a wave of DTC independent station brands going out to sea. Compared with the traditional extensive low-cost model, the independent station pays more attention to the DTC brand's ability in product polishing, brand power, operation, warehouse management, etc. From the original flow-oriented operation, to create explosions, to deep cultivation fine, improve the conversion rate of the link. Management also from the new channel exploration, development into brand breeding, public domain traffic to private domain traffic precipitation.

, the disadvantages of independent stations are also obvious. First, it is too difficult to obtain traffic due to the lack of user operation thinking. Second, there is a lack of mature traffic operation experts. Third, the website has a long growth cycle and high cost.

cross-border e-commerce seems to be a mysterious and grand industry. In fact, the profit points are very scattered. From procurement, logistics, performance, operation, to cash flow, every step is full of uncertainty. However, what is certain is that today's market has gone through a period of wanton growth. In the future, more attention will be paid to industry compliance, diversified hedging and brand building. How to fight against the new round of entropy increase is a difficult problem that every player needs to consider.